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Craig Foss

22 May, 2013

Select Committee reports back on Financial Reporting Bill

Commerce Minister Craig Foss has welcomed the Commerce Select Committee report on a bill to cut the financial reporting burden for smaller companies.

The Financial Reporting Bill removes the requirement for smaller companies to produce complex financial statements. It allows shareholders of small and medium sized companies to decide whether the company must prepare financial statements.

“This Bill removes expensive and unnecessary reporting obligations and is an important part of the Government Business Growth agenda to grow New Zealand’s capital markets,” says Mr Foss.

“The changes will let small and medium-sized companies direct resources where the need is greatest – growing their business.

“The Bill will also improve the quality of financial reporting by charities and allow the External Reporting Board to issue accounting standards for registered charities,” says Mr Foss.

The Select Committee’s changes include:

  • Increasing the threshold at which a not-for-profit entity must prepare financial statements on an accrual rather than cash basis from $40,000 to $125,000. This reduces the burden for smaller charities, which may not have capacity to prepare complex reports.
  • Extending the deadline in which large companies that are not issuers, must prepare financial statements from three months to five months of balance date.

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